1

Increasing Investment in HealthOutcomes for the Poor:

Second Consultations onMacro-economics and Health:

The role of Aid Predictability and Co-ordination as a key part of overall efforts

to improve Aid Effectiveness.

Paul IsenmanDevelopment Cooperation Directorate, OECD

2

Aid Volume: ODA as a per cent of GNI

(provi-sional)

Projection based onMonterrey

commitments

0.43

0.15

0.44

0.34

0.34

0.23

0.280.310.23

0.26

0.21

0.12

0.00

0.10

0.20

0.30

0.40

0.50

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

per c

ent

EU countriesTOTAL DAC

Japan

United States

Aid to health: 1997-99 Average: $6.4 billion2002: $8.1billion

3

What are DAC Donors Doing toImprove Aid Effectiveness?

Evaluationand RBM

Peer Reviews

Improving Aid Effectiveness

Policy CoherenceFor Development

Data Collection,Indicators, and Statistical

Capacity BuildingAgreed good practice in Key

Sectors and Cross-cutting Issues –e.g. HEALTH AND POVERTY

Harmonisation andAlignment behind

Country-led Programmes

Support for Country-Led Programmes

Improved aidallocations

Back-up Strategyfor DifficultPartnerships

/LICUSINCREASE AIDPREDICTABILITY

Untying and Procurement

Support for MDGs and Multi-dimensional Poverty Reduction

Support for GPGs

4

What is OECD’sDevelopment Assistance Committee (DAC)?

� The 30-member OECD: a participative inter-government think tank and policy forum in allkey areas of economic and social policies

� The DAC is the permanent body where bilateraldonors work with multilaterals towards co-ordinated,effective and adequately financed internationalsupport for developing countries.

� Key areas of activity: peer review; statistics; policycoherence; policy agreements (e.g. untying); aideffectiveness; cross-cutting issues:poverty, health,environment, gender, conflict, governance.

5

The problem:The problem:

1 Donor driven priorities & systemsDonor driven priorities & systems

Difficulties with donor proceduresDifficulties with donor procedures

Uncoordinated donor practicesUncoordinated donor practices

Excessive demands on timeExcessive demands on time

Delays in disbursementsDelays in disbursements

Lack of informationLack of information

Demands beyond national capacityDemands beyond national capacity

234567

HARMONISATION AND ALIGNMENT BEHIND COUNTRY-LED

PROGRAMMES

6

The solutions:The solutions:

1 Simplify procedures & systemsSimplify procedures & systems

Harmonise proceduresHarmonise procedures

Align procedures on recipientsAlign procedures on recipients

Share informationShare information

Untie aidUntie aid

Respect national prioritiesRespect national priorities

Strengthen local capacityStrengthen local capacity

234567

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The DAC’s action plan...The DAC’s action plan...

�…to respond to this diagnosis – whichwhich the DAC agrees -- is set out in apublication:

�� “Harmonising Donor Practices for Effective Aid“Harmonising Donor Practices for Effective AidDelivery” (www.Delivery” (www.oecdoecd.org/DAC).org/DAC)

�It provides practical guidance on whatdonors can do to meet this importantchallenge.

8

Rome High Level ForumRome High Level Forum

�Donors agreed to take action:�� Individual Donors:Individual Donors:

�Reform corporate culture (new incentive structures).

�Change procedures.

�� Between donors:Between donors:�Deliver aid in accordance with partner country priorities & systems.

�Rationalise their activities and missions.

�� Partner countries:Partner countries:�Country based action plans on Harmonisation

�Take the lead on co-ordination activities.

..

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New DAC Working PartyNew DAC Working Party

� WP Aid Effectiveness and Donor Practices:� �Harmonisation of donor practices & Alignment behind partner

countries’ priorities, policies, systems and procedures� facilitating and monitoring change at the country level, with

supporting change at the headquarters level.

� � Public Financial Management.

� � Procurement – capacity strengthening and commonstandards.

� � Untying aid. Implementing and extending 2002 agreement.

� � Result-Based Management – donors and partner countries.

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Working Party on Aid Effectiveness and Donor Practices:

Proposed Work Programme on Public FinancialManagement (PFM)

Predictability of aid flowsProgress indicators of PFM

Budget supportAccounting standards

11

Reasons for lack of aid predictability and uncertainty

� Issues on donor side to harmonise and align better– Commitments and disbursements aligned with donors’ internal

programming and budgeting cycles and priorities rather thanwith those – and the health needs -- of partner countries

– Lack of coordination across donors in terms of reliability andtiming of disbursements

– Criteria and conditions are donor specific and not explicitlylinked globally to PRSP content or to sectorally to health needs.

� Issues on partner country side re– Weak budgetary and financial management systems in many

partner countries– Uncertainties re policies, programmes, or implementation

capacity in some partner countries

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Increasing the Predictability of Aid Flows

� Solutions will require substantial changes to procedures andpractices by both sides and will be a multi-yearundertaking

� Short-terms steps include– Greater exchange of information.

• Consider how to improve data on availability of aidcommitments and disbursements beyond what is nowreported to DAC.

– Focus on the national health budget as framework forsupport• Bringing aid funds within country budget (vs. off-

budget).

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Role of the PRS, health strategies, and donorprocedures as the framework for coordination on health

� Alignment of implementation of PRS and health sectorstrategies with budget cycle by the partner country

� Partner country-led plan for capacity building, supportedby donors.

� Donors reduce restrictions on how aid is used: e.g.,financing recurrent costs, programmatic as well asproject-specific funding, and further untying.

� Donors commit in advance to overall envelope of support� Donors align the content of their programs with PRS and

health sectoral priorities� Donors need take account of differing needs by country,

e.g. re need or desirability of working through NGOs, orre differences in health problems.

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Moving towards multi-year commitments� Country’s overall and health budgets set each year

in terms of multi-year priorities and programs setout in PRSp and health strategy and includedwithin the MTEF

� More detailed specification of medium-termexpenditure program.

� Finance Ministries --and IMF-- build moreflexibility in macro-frameworks to take account ofaid– including contingent spending plans to handle possible

large supplementary inflows from global funds, asappropriate.

� Clear identification of remaining financingrequirements

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Issues for reflection� Are health priorities adequately reflected in the PRS and

annual and medium-term budget cycles?� IF not, what can we do so that the moral and development

priority of health get translated into higher priority atpolitical levels for both partner countries and donors?

� Are advance decisions – or at least indications -- on theenvelope of support feasible for individual donors?

� What risk management techniques can be used to handleuncertainty in flows from traditional donors and globalfunds (e.g. contingencies in financing plans, reserves)? Howcan aid for health be at least partially insulated from theseuncertainties?

� What are the tradeoffs between increasing predictability,increasing quantity and quality of aid, and performance-based disbursements?

� What are the tradeoffs between backing country budgetpriorities and assuring additionality of aid to health?

16

What are DAC Donors Doing toImprove Aid Effectiveness?

Evaluationand RBM

Peer Reviews

Improving Aid Effectiveness

Policy CoherenceFor Development

Data Collection,Indicators, and Statistical

Capacity BuildingAgreed good practice in KeySectors and Cross-cutting Issues– e.g. HEALTH AND POVERTY

Harmonisation andAlignment behind

Country-led Programmes

Support for Country-Led Programmes

Improved aidallocations

Back-up Strategyfor DifficultPartnerships

/LICUSINCREASE AIDPREDICTABILITY

Untying and Procurement

Support for MDGs and Multi-dimensional Poverty Reduction

Support for GPGs

17

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Origins of DAC Reference Document onPoverty and Health

� DAC Network on Poverty Reduction� DAC Guidelines on Poverty Reduction

2001� Commission on Macro-economics and

Health� Creation of Subgroup on Poverty and

Health Jan 2001– Dec 2002

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Outline

� Key Actions to Promote a Pro-Poor HealthApproach

� Rationale for Investing in Health� Supporting Pro-Poor Health Systems� Key Complementary Policy Areas for Pro-Poor

Health� Frameworks and Instruments for Health

Programming and Monitoring� Policy Coherence and Global Public Goods

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A pro-poor health approach (1)

� gives priority to promoting, protecting and improving the health of the poor

� includes the provision of quality public health andpersonal care services, with equitable financing

mechanisms

Global public goods and support for action in relatedsectors vital part of a pro-poor health approach.

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• Supporting Pro-Poor Health Systems

� Health Sector Stewardship� Strengthening the Delivery of Services

• Addressing the priority needs of the poor• health systems, HIV/AIDS & other diseases,

• Reaching highly vulnerable groups• Increasing demand and participation

� Developing Equitable Financing Systems• Risk sharing and repayment• Cost sharing approaches and user fees

� Provider Pluralism• Developing partnerships with the private sector

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3: Key Complementary Policy Areas for Pro-PoorHealth. Health care alone is not enough.

� Education� Food Security & Nutrition� Water and Sanitation� Indoor and Outdoor Air Pollution� Interpersonal Violence� Road Traffic Injuries� Tobacco

23

KEY ACTIONS TO PROMOTE A PRO-POOR HEALTH APPROACH

Support strategies to improve service delivery including betterpublic services and partnerships with the private sector toincrease coverage.

Develop partnerships with the private sector andNGOs for the delivery of health services.

7

Assist civil society organisations and communityrepresentatives to increase their capacity to participate inhealth policy and programmes.

Support health policies through decentralisationand greater local capacity to deliver services.Ensure meaningful community participation.

6

Support capacity in social impact analysis, to make healthsystems, including financing, more accessible to the poor.

Strengthen health financing systems that allowfor equitable access of the poor to healthservices.

5

Facilitate the identification of disease patterns, and the healthservice needs of poor people and vulnerable groups.

Provide accessible, affordable, and responsivequality health services.

4

Strengthen capacity for the execution of the core functions ofthe ministry of health.

IIDevelop effectivepro- poor health

systems

Assume key public- sector functions in health:policy- making, regulation, purchase andprovision of services.

3

Scale up assistance for the achievement of the health- relatedMDGs and poverty reduction.

Mobilise additional domestic resources for healththrough budget reallocations and HIPCrepayment savings. Improve the efficiency ofhealth spending. Improve financial systems forgreater transparency and accountability.

2

Encourage greater understanding of the contribution of healthto pro-poor growth and development. Foster dialogue onhealth and other policies that underpin a pro-poor healthapproach.

IMobilise political will

and additionalresources for health

Demonstrate political will to reduce poverty andachieve the health- related MillenniumDevelopment Goals.

1

DEVELOPMENT AGENCY(Support role for partner-led efforts)ACTIONPARTNER COUNTRY

24

Promote policy coherence – including trade and migration –to support pro- poor health. Follow up the Doha Declarationon TRIPS and Public Health regarding affordable access ofpoor countries to priority drugs and vaccines.

Fully explore the potential of TRIPS for providingaffordable essential drugs to poor people.

14

Support international initiatives for GPGs for health such asresearch on affordable drugs and vaccines for diseases ofthe poor. Integrate support for GPGs in overall developmentstrategies.

VPromote global public

goods and policycoherence for pro-poor

health

Participate in priority-setting for the provision ofglobal public goods (GPGs) for health andintegrate it into PRS.

13

Strengthen national statistical capacity and monitoringsystems to measure progress towards health and povertyreduction objectives. Accept a balance between nationaland international monitoring needs.

Select core indicators to monitor health systemperformance and health outcomes with a focus onequity (including gender), access, quality andfinancing.

12

Ensure that Global Health Initiatives support countryownership and policies.

Ensure that Global Health Initiatives (GHIs) areintegrated into national systems.

11

Build capacity for poverty and gender analysis in health.Improve links and policy consistency between PRSand health-sector programmes (and other sectorsimpacting on health).

10

Promote greater country leadership and ownership for theelaboration and implementation of PRS and health-sectorprogrammes. Work towards common procedures for aiddelivery and evaluation.

IVWork through country-led poverty reductionstrategies and health-sector programmes,

and monitor progresstowards improvedhealth outcomes

Lead, own and implement a comprehensive health-sector programme and integrate it into the PovertyReduction Strategy (PRS).

9

Help generate greater recognition of the potential impact ofsector policies on health such as education, nutrition, waterand sanitation.

IIIFocus on other sectorpolicies impacting onpoor people's health

Facilitate cross- sectoral collaboration andharmonisation of policy objectives to improvehealth outcomes. Mandate and resourcenon- health ministries to do so.

8

DEVELOPMENT AGENCY(Support role for partner-led efforts)ACTIONPARTNER COUNTRY

25

So what is needed is to increaseeffectiveness and predictability of aid

for health is not simple. But as bilateraland multilateral donors and partner

countries, working together, we can andmust make vigorous progress to achieve

both.

Thank you for your time and attention.